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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | 19. Income Taxes (Benefit from) provision for income taxes from continuing operations consists of the following for the periods presented (in thousands):
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 68,939 |  |  | $ | 63,041 |  |  | $ | 48,292 |
State |  |  | 14,413 |  |  |  | 13,769 |  |  |  | 6,715 |
Foreign |  |  | 933 |  |  |  | 755 |  |  |  | 778 |
Total current provision |  |  | 84,285 |  |  |  | 77,565 |  |  |  | 55,785 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | (72,046 | ) |  |  | 9,808 |  |  |  | 13,339 |
State |  |  | (22,495 | ) |  |  | 6,377 |  |  |  | (1,892 | )
Foreign |  |  | 557 |  |  |  | 360 |  |  |  | 325 |
Total deferred provision |  |  | (93,984 | ) |  |  | 16,545 |  |  |  | 11,772 |
(Benefit from) provision for income taxes |  | $ | (9,699 | ) |  | $ | 94,110 |  |  | $ | 67,557 |
A reconciliation of the U.S. federal statutory rate to the effective tax rate is as follows for the periods presented:
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
U.S. federal statutory rate on income before income taxed |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
Impact of foreign operations |  |  | (2.2 | ) |  |  | (0.1 | ) |  |  | 1.7 |
State income taxes, net of federal tax effect |  |  | 45.6 |  |  |  | 4.7 |  |  |  | 3.9 |
Nondeductible expenses and permanent differences |  |  | (30.7 | ) |  |  | 0.4 |  |  |  | 2.1 |
Change in valuation allowance |  |  | (0.1 | ) |  |  | 0.2 |  |  |  | (2.8 | )
Unrecognized tax benefit |  |  | (14.8 | ) |  |  | — |  |  |  | (0.9 | )
Federal tax credits |  |  | 9.8 |  |  |  | (0.6 | ) |  |  | (0.8 | )
Noncontrolling interest |  |  | 7.4 |  |  |  | (0.4 | ) |  |  | (0.4 | )
Other |  |  | 2.2 |  |  |  | — |  |  |  | 0.7 |
Effective income tax rate |  |  | 38.2 | % |  |  | 25.2 | % |  |  | 24.5 | %
For the year ended December 31, 2023, the benefit from income taxes was $(9.7) million, reflecting an effective tax rate of 38.2%, compared to the provision for income taxes of $94.1 million, reflecting an effective tax rate of 25.2%, for the year ended December 31, 2022. The Company’s lower pre-tax results for the year yields higher volatility in the items impacting the effective tax rate for the year ended December 31, 2023 when compared to prior periods. The domestic and foreign components of (loss) income from continuing operations before income taxes are as follows (in thousands):
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Foreign |  | $ | 5,889 |  |  | $ | 5,420 |  |  | $ | 5,596 |
Domestic |  |  | (31,249 | ) |  |  | 368,723 |  |  |  | 270,164 |
(Loss) income from continuing operations before income taxes |  | $ | (25,360 | ) |  | $ | 374,143 |  |  | $ | 275,760 |
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities of the Company at December 31, 2023 and December 31, 2022 were as follows (in thousands):
|  | December 31, |
|  | 2023 |  |  | 2022 |
Deferred tax assets: |  |  |  |  |  |
Net operating losses and tax credit carryforwards – federal and state |  | $ | 5,729 |  |  | $ | 7,333 |
Capital loss carryovers |  |  | 215,175 |  |  |  | 215,745 |
Bad debt allowance |  |  | 1,780 |  |  |  | 1,148 |
Accrued compensation and severance |  |  | 18,250 |  |  |  | 18,784 |
Insurance reserves |  |  | 17,343 |  |  |  | 20,924 |
Leases |  |  | 948 |  |  |  | 862 |
Accrued expenses |  |  | 1,091 |  |  |  | — |
Accrued Desert Hills settlement |  |  | 104,636 |  |  |  | — |
Interest carryforward |  |  | 2,430 |  |  |  | 2,639 |
Lease right-of-use liabilities |  |  | 29,781 |  |  |  | 26,277 |
Fixed asset basis difference |  |  | 2,914 |  |  |  | 2,128 |
Other assets |  |  | 9,130 |  |  |  | 8,987 |
Total gross deferred tax assets |  |  | 409,207 |  |  |  | 304,827 |
Less: valuation allowance |  |  | (217,137 | ) |  |  | (217,705 | )
Deferred tax assets |  |  | 192,070 |  |  |  | 87,122 |
Deferred tax liabilities: |  |  |  |  |  |
Prepaid items |  |  | (4,609 | ) |  |  | (3,714 | )
Accrued expenses |  |  | — |  |  |  | (5,713 | )
Intangible assets |  |  | (152,284 | ) |  |  | (139,843 | )
Lease right-of-use assets |  |  | (27,800 | ) |  |  | (24,960 | )
Investment in foreign subsidiary |  |  | (2,650 | ) |  |  | (2,530 | )
Total deferred tax liabilities |  |  | (187,343 | ) |  |  | (176,760 | )
Total net deferred tax asset (liability) |  | $ | 4,727 |  |  | $ | (89,638 | )
The Company records a valuation allowance to reduce its net deferred tax assets to the amount that is more likely than not to be realized. At December 31, 2023 and 2022, the Company carried a valuation allowance against deferred tax assets of $217.1 million and $217.7 million, respectively. These amounts are primarily related to deferred tax assets related to the Company’s capital loss carryforward resulting from the U.K. Sale and certain state net operating losses. If the capital loss carryforward is not utilized, it will expire in 2026. As of December 31, 2023 and 2022, the Company had no federal net operating loss carryforwards. The foreign net operating loss carryforwards at December 31, 2023 and 2022 are approximately $0.1 m illion and $0.1 million, respectively, and have no expiration. The Company has state net operating loss carryforwards at December 31, 2023 and 2022 of approximately $175.9 million and $191.5 million, respectively. These net operating loss carryforwards, if not used to offset future taxable income, will expire from 2024 to 2036. In addition, the Company has certain state tax credits of $0.2 million which will begin to expire in 2030 if not utilized. Income taxes receivable was $12.4 m illion and $28.9 million at December 31, 2023 and 2022, respectively. At December 31, 2023, the $12.4 million of income taxes receivable is included in other current assets, while at December 31, 2022, $5.8 million of income taxes receivable was included in other current assets and $23.1 million was included in other assets in the consolidated balance sheets. Income taxes payable of $0.0 million and $1.3 million at December 31, 2023 and 2022, respectively, was included in other accrued liabilities in the consolidated balance sheets. The Company has recorded liabilities related to unrecognized tax benefits of $4.0 million and $0.0 million at December 31, 2023 and 2022, respectively. These amounts are inclusive of interest and penalties of $0.9 million and $0.0 million, respectively, and are included in other liabilities on the consolidated balance sheets. The amount of unrecognized tax benefit, if realized, that would affect the effective tax rate is $3.8 million and $0.0 million at December 31, 2023 and December 31, 2022, respectively. A reconciliation of the beginning and ending amount of unrecognized income tax benefits, exclusive of any interest and penalties, is as follows (in thousands):
| 2023 |  | 2022 |  | 2021 |
Balance at January 1 | $ | — |  | $ | — |  | $ | 2,060 |
Additions based on tax positions related to the current year |  | — |  |  | — |  |  | — |
Additions for tax positions of prior years |  | 3,089 |  |  | — |  |  | — |
Reductions as a result of the lapse of applicable statutes of limitations |  | — |  |  | — |  |  | (2,060 | )
Balance at December 31 | $ | 3,089 |  | $ | — |  | $ | — |
The Company and its subsidiaries file income tax returns in federal and in many state and local jurisdictions as well as foreign jurisdictions. The Company may be subject to examination by the Internal Revenue Service (“IRS”) for calendar years 2020 through 2022. Additionally, any net operating losses that were generated in prior years and utilized in these years may also be subject to examination by the IRS. While no foreign jurisdictions are presently under examination, the Company may be subject to examination for calendar years 2019 through 2022. Generally, for state tax purposes, the Company’s 2018 through 2022 tax years remain open for examination by the tax authorities. At the date of this report, there were no material audits or inquiries that had progressed sufficiently to predict their ultimate outcome.

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